Governance framework

Government Pension Fund Global (GPFG)

The Storting has, in the Government Pension Fund Act, accorded the Ministry of Finance formal responsibility for the management of the Fund. Operational management of the Government Pension Fund Global (GPFG) is carried out by Norges Bank. The Ministry has issued provisions on Norges Bank's management in a separate mandate.

The mandate describes the general investment framework for the Fund and stipulates requirements with regard to risk management, reporting and responsible management. Within the limits set by the Ministry, Norges Bank shall strive to achieve the highest possible return after costs. The management mandate implies a moderate scope for deviation from the benchmark index set by the Ministry.

The point of departure of the governance framework is that decisions that contribute to determining the overall level of risk of the Fund shall be sanctioned by the Storting. This is primarily achieved through the deliberation of the annual report on the Government Pension Fund, which provides the Storting with an opportunity to discuss important aspects of the management of the Fund. The Ministry adopts, based on the deliberations of the Storting, a general framework and provisions for the asset management. These are supplemented by more detailed limits and rules at the various decision-making levels in the management chain.

The management of the GPFG is based on a governance structure in which the Storting, the Ministry of Finance, Norges Bank's executive board and Norges Bank Investment Management (NBIM) have different roles and responsibilities. Duties and authorisations are delegated downwards in the system, while reporting on return and risk are made upwards. At all management levels of the Fund, there are in place sound control and supervisory bodies. Regulations and delegation authorisations will necessarily be more detailed further down the pyramid.